as Commercialization
vw PHARMEXEC COM
8 Winning Commercial
Portfolio Strategies
Biopharma companies are increasingly leveraging
product portfolios to own and dominate strategically
important therapeutic areas
STAN BERNARD, 9
er ora
es edtoal
onsary Boar, s
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Jor decades, pharmaceu:
tical companies focused
‘on their research prod:
vuct portfolios to opti
mize the right mix of drug ean.
didates for successful clinical
development. However,
only been in the last 15 years
that organizations have begun
optimizing and emphasizing
their commercial product port
folios. This concentration on
commercial portfolios has been.
highlighted by the number of
‘companies that are increasingly
balking up and focusing in cer
tain therapeutic product portfo-
lio areas while shedding some
long-standing assets in others.
For example, Novartis
recently obtained most of Glas:
‘oSmithKline’s oncology prod.
ucts while sending GSK its vac
cine business (excluding
influenza products) and creating,
a consumer healthcare joint ven
ture, According to Novartis
CEO Joseph Jimenez, “The
completion of the GSK transac
tions focuses Novartis, and fur
ther establishes our leading posi-
tions in key growing business
segments.”
Asa result of the transaction,
GSK becomes the world’s lead~
ing vaccine manofacturer and a
‘more focused consumer health-
care products player. “We will
now be focused on rapidly imple
‘menting our integration plans to
realize the growth and synergy
opportunities we see in the new
Consumer Healthcare and Vac-
cines businesses,” stated GSK
CEO Andrew Witty
Similarly, in 2015, GSK
‘obtained Bristol-Myers Squibb’s
HIV pipetine, effectively ending
nearly three decades of BMS
HIV research while significantly
‘enhancing GSK"s HY pipeline
ar ViiV Healtheare, an HIV
business largely owned by GSK.
‘This transaction followed BMS's
divesture of its long-time diabe-
tes business by selling its stake
in the Global Diabetes Alliance
to AstraZeneca, These actions
have enabled BMS to coneen-
trate on developing andl acquir-
ing numerous assets and capa
bilities in immuno-oncology
(10), where it has become the
world’s leader.
‘These are just a few of the
numerous examples of compa
nies secking 10 dominate thera
peutic areas or *Strategically-
Owned Areas.” SOAs can be
therapeutic portfolios or geo:
graphic areas; collections of
similar therapeutic Functions,
chemical pathways (et. check-
point inhibitor agents for cancer
or HER-2 pathway agents) or
mechanisms of action; business
segments or other unique mar-
ket niches.
‘Over the past 15 years, mar
ket leaders have focused on win
ning SOAs by using clearly
defined product portfolio trae
ics. There are two main reasons
for this intensive and highly
selective portfolio-based
approach. The pharma indus
try’s major markers transitioned.
from che growth or Commercial
Stage (*Pharma 1.0") of its life
cycle o the mature or Competi-
tive Stage (“Pharma 2.0"). In
this highly competitive era, com-
panies cannot be general mass
marketers and seck to conquer
the worlds instead, they must
make strategic decisions and
focus on prioritized areas they
can win, These approaches are
analogous to the board game
Risk, where players concentrate
their forces on conquering a con-
tinent like Australia or South
America to own their own terri-
tory from which they can grow
stronger and attack other geo:
graphic areas.
In addition, in Pharma 2.0,
companies not only compete at
the brand level as they did in
Pharma 1.0 but also ar the fran-
chise, portfolio, and corporate
levels, a concept called *Multi-
Level Competition.” Competing
with a portfolio of products in
4 specific therapeutic category
offers companies many compet-
itive advantages vs. competing
only with a single brand: cost
and operating efficiencies; co.
positioning and co-promotion
‘opportunitiess pricing and con-
tracting options; product com-
binations, either company-spe-
cific regimens or fixed-dosed
combinations; enhanced corpo:
rate reputation and branding;
better and deeper stakeholder
relationships and opportunities:
greater licensing, clinical and
business development offerings.
In fact, a 2011 Oliver Wendell
research study revealed that
focused pharma category lead-
cers had 5.5 times greater reve-rue, twice the licensing deals,
and 70% greater product devel:
opment success rates
Companies have utilized
numerous portfolio approaches
to help them win market share
and SOAs. Here are eight exam-
ples of focused commercial por:
folio strategies:
Crown Jewel: Celgene has
become the world’s leader in the
treatment of multiple myeloma
(MM) by promoting immuno:
modulatory drugs (IMiDs} asthe
backbone of MM cancer ther:
apy. Importantly, Celgene high-
lights one of its three marketed
IMiDs, Revlimid, as first- and
second-line backbone therapy
along with other non-IMiD
combination agents. The com:
pany positions its two other
marketed IMiDs, Thalimid and
recently, Pomalyst—despite
being newer and potentially
more porent than Revlinid
secondary or tertiary choices,
This approach is known as a
“Crown Jewel” portfolio strat
egy, since the company has
clearly anointed the blockbuster
Revlimid as the primary option
for physicians, See Figure 1
Crown Prince: In contrast,
Novo Nordisk anoints a new
product leader every few years
in its world-leading diabetes
portfolio. For example, Novo's
GLP-1 agent Victoza has been
the company’s focus since its
pre-launch and ultimare U.S
launch in 2010 (EU in 2009),
‘The drug was a billion-dollar
blockbuster in is first sales year
and has grown to neatly $8 bil
lion in global sales with a GLP-L
market share exceeding 60%
However, the drug has recently
faced intense pressure from com
petitive agents, especially from
Eli Lilly's Tracity and payers,
including an exclusion from the
Figure 1:
Celgene has cepioye a “Crown Jee” poe
a for piyscans for fst and second-line backbone MM theragy in combination with
Biman 0
CVS/Express Scripts US formu:
lary. As a result, Novo has
already anointed it next Crown
Prince, the once-daily oral
GLP-A and Victoza follow-up
semaglutide. In fact, Novo has
announced two head-to-head
trials of semaglutide vs. both
Victoza and its SGLT-2 rival
Jardiance. Novois hopin
tlutide will demonstrate efficacy
jority over the injectable
isa and oral SGLT-2 agents,
In fact, recent preliminary data
from the SUSTAIN 6 Phase IIT
trial demonstrated that the next
generation GLP-1 semaglatide
reduced major cardiovascular
risk by 26%, a higher rate chan
that seen by either Victoza or
oral rival Jardiance in their
respective CV trials
All the King's MOA: GSK has
long been the global leader in
respiratory, typically owning
vera third of the marker. While
GSK pursued a Crown Jewel
-8y with its $6 billion/year
AdvairiSeretide Diskus, the
‘company has been transitioning
to an “All the King’s MOA"
Commercialization «
WIV PHARMEREC COM
[Vertaal
ullding on the IMID Backbone Across AllLnes of Muitiple Myeloma
nie preenting mull immunomodulatory drugs (Mis) to treat mutiole myeloma MN),
joka strategy by ancatng the blockbuster Revi asthe
strategy as Advair faces greater
generic competition. At one
point, GSK was pursuing 11 dif-
ferent marketed or pipeline
agents with different mecha
nisns of action. In 2015, GSK
offered four products that gener
ated 90% of its respiratory sales;
by 2020, the company plans to
hhave nine different products gen:
crating roughly the same 90% of
sales despite generic threats
Similarly, GSK has the world’s
broadest portfolio of vaccines,
including over 25 pediatric, ado-
lescent, adules/travelers, and
elderly vaccines. The company
covers greater than 90% of the
US/EU universal vaccine recom
mendations and provides nearly
one billion vaccines annually.
Sovereign Guidelines: To
offset GSK'S dominance in respi
ratory, Novartis adopted a “Sov
ereign Guidelines Strategy” in
which it strategically positioned
their key chronic obstructive
pulmonary disease products
Onbrez, Seebri, and Ultripro by
the 2013 GOLD Guidelines.
Continued on Page 73Commercialization 7:
Continued trom Page 47
Other companies have sought to Industry Model: Franchise Fiefdom
position their therapeutic area HER2 Franchise— Strengthening Standard of Care
products by clinical guidelines
Franchise Fiefdoms: Roche
thas been the dominant player in
oncology by leveraging a “Fran
chise Fiefdoms Strategy.” The
company establishes a beach
head im a strategic space such as
the HER2 pathway with its
agent Herceptin, establishes a
new standard of eare for HER2+
metastatic breast cancer patients,
\d then grows the fiefdom by
using new indications, formula:
fete Ti tsmianea Soc eters ew 0 ll New ine
Roche's current HER2 Franc!
Fieldom for metastatic, neoadju- Figure 2: Roche continues te pace the encology market by using a “Franchise Fiefdoms Strategy”
vant, and early breast eaneer The company has been expanding the fiefdom by using new indications, formulations, and
includes and combines Her- combinations of agents
cept, recent HER2 agents Per-
jeta and Kadcyla, and the new 10 portfolio. This is especially tions, AbbVie has strategically
PD-L1 agent Tecentrig. Roche important when one or more of developed the world’s best-sell-
hhasapplied this winning portto- its 10 agents fails an important ing drug, with global sales
lio co several other eancer spa trial, ashappened recently when exceeding $13 billion.
such as anti-CD-20 (Ritnxan, its CheckMace-026 study failed These are just a few of the
MabiThera), angiogs ras t0 show a benefit for Opdivo in myriad of commercial portfolio
tin), and recently immunorher- first-line treatment of advanced strategies that pharmaceutical
apy (Tecentrig and many other non-small cell lung cancer. firms.can use to win, Most com-
aygents). See Figure 2 Combination King: Gilead panics identify and execute their
Royal Halo: To compete with Sciences has been the leader in hest portfolio strategy in a series
Roche in oncology, BMS has using fixed-dosed combinations of steps. They usually stare with
sought to carve out part of the of its anti-viral portfolio prod- a *Commerci
Poctfolia Strate
oncology space by using a ucts to win. The company — gies Brainstorming Workshop”
“Royal Halo Strategy.” The launched Seribild, a four-ingre- to brainstorm, identify, and pri
company has strategically dient single tabler regimen for oritize two to four potential
helped co ereare and own the IO HIV and recently combined portfolio strategies that might
space with a vase portfolio of Soluadi, which had been the work for their specific sit
immunotherapy products. BMS industry's best-launched prod- Then they conduct a “Commer
has [0 products Yervoy and uct, witha second agent, ledipas- cial Portfolio Strategy Competi-
Opdivo on the market
currently pursuing numerous billion dollar single-tabler their and their competitors’
other IO agents, including effec- regimen for hepatitis C patients. portfolio strategies in order to
rorand nowettector Tcellsand Jack of AllTrades: Hummina is pressure-testand select rhe win-
natural killer (NK) cells mecha- the poster child for the “Jack of ning portfolio strategy. Lastly,
hiss as well as tumor cell tar All Trades” or indications strat- they incorporate the preferred
eted pathways, egy. AbbVie has essentially cre- portfolio strategy into their
importantly, by secking to ared a “portfolio in a pill” by existing portfolio, franchise,
Javmthe [spaces BMS does not obtaining 10 indications for the and brand plans to ensure inter
jocuson any one product immunology agent Himira, By nal alignment and successful
all pursuing these and other indica execution. @
Wd is vir, to form Harvoni, a multi- tive Simulation” to simulate